How Much Gatwick Oil Is There?

UK Oil and Gas Investments (UKOG) have announced that there may be up to 100 billion barrels of crude oil waiting to be extracted from Horse Hill field, near Gatwick Airport, in the leafy Sussex Weald. That's an awful lot of zeroes (eleven to be exact) and an awful lot of oil.

Read our news story to find out more about the Gatwick oil find: Gatwick Has Struck Black Gold. But Can We Mine It?

Is there really that much – and if not, what is the reality? It's kind of an important question before we get too excited about the potential.

Broad range of figures

The focus has been on the upper figure of 100bn barrels, but what UKOG actually said was that they were looking at 'between 50bn and 100bn barrels’. That's a major leap from last year's projected figure of 4.4 billion barrels by the British Geological Survey, but is still actually rather wide spread. Mr Average would be pretty disappointed if he were expecting a pay-out of £100 and only received £50.

Add several zeroes to those figures and the disparity is actually very significant - indeed 'huge' would not be an unreasonable adjective to use in the circumstances. UKOG claim that this is a very significant find and could meet between 10% and 30% of the UK's needs and demands by 2030.

The company themselves admitted, though, that while they do believe that up to 100bn barrels may be hiding below the Sussex countryside, only 3-15% of the total would, in all likelihood, be recoverable, judging by the experience of similar finds in the United States. Three per cent of an awful lot is still a lot, but the impact on the mind – and the economy – rather less dramatic.

Reality check

There has been understandable excitement of course – and the inevitable rush of potential investors has seen UKOG's share price almost triple since the announcement, but the range of figures being mooted is sufficient reason for pause and reflection. Not least of the issues to be considered is the matter of current oil prices, which have almost halved in the last year. Would the actual potential, whatever it is, make it economically viable to pursue this find?

Another important consideration is that UKOG know they are going to face a weighty political backlash when residents of this affluent corner of England consider the prospects of oil drills all over their hitherto leafy and rural environment. The company says it will not have to use the controversial 'fracking' method to access any of the oil – but the moment the F-word rears its head the inevitable political and environmental resistance will start to rise exponentially. A reassessment of the find and how to access the useable percentage thereof may be required, both to calm the hype and to reassure investors.

To find out more about how oil is found, read this article: How to Find Oil and Gas.